State of Origin
Origin Energy has dropped unsubtle hints that Brookfield's $18.7 billion takeover offer undervalues the company.
If ever there was an ideal time for Brookfield to fatten its $18.7 billion takeover offer for Origin Energy, it would be now.
While Origin continues to recommend the offer to shareholders and is engaging constructively with Brookfield, the board and management’s stance has markedly shifted. In his AGM speech on Wednesday, Origin chair Scott Perkins told shareholders the board had “visibility of various factors shaping the outlook of the business” when it decided to recommend the deal back in March.
He also noted that Origin’s share price had since risen to $9.30 per share (the offer price was $8.90 per share at the time it was recommended), which is partly due to movements in the US dollar on which part of the consideration is based. Reading between the lines, this suggests that Origin believes the outlook for the business has improved since it signed the deed of implementation, but it is now bound by law to recommend the offer to shareholders so it can’t explicitly call for a higher offer price.
But by flagging the outlook and noting the share price increase, the board’s subtext is that the Brookfield offer no longer reflects the true value of the company — something that its largest shareholder AustralianSuper and others including Perpetual have been arguing for months.
